A NC mortgage lender who uses different underwriting criteria for borrowers in predominantly minority zip codes has likely engaged in:
Why Reverse redlining or discriminatory underwriting that may violate ECOA and FHA Is Correct
Answer B: Reverse redlining or discriminatory underwriting that may violate ECOA and FHA
Exam Tip: Fair Housing
Fair Housing questions test both federal (Fair Housing Act of 1968) and state-level protected classes. The federal protected classes are race, color, religion, national origin, sex, familial status, and disability. Many states add additional protections.
Key Fair Housing Terms in This Question
Federal law prohibiting discrimination in the sale, rental, or financing of housing based on race, color, national origin, religion, sex, disability, and familial status.
RedliningAn illegal practice where lenders or insurers deny services or charge higher rates in certain neighborhoods based on the racial or ethnic composition of those areas.
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Related North Carolina Questions
- Under the Fair Housing Act, a lender who charges higher fees or interest rates to minority borrowers with similar qualifications compared to white borrowers is engaged in:Fair Housing
- Under the Fair Housing Act, a real estate agent who shows a Black buyer only homes in predominantly Black neighborhoods and does not show homes in white neighborhoods is engaged in:Fair Housing
- A NC lender who uses 'redlining' in mortgage lending decisions is guilty of:Finance
- A NC real estate agent who uses social media to target listings only to certain racial or ethnic groups using Facebook's audience targeting tools has likely violated:Fair Housing
- A lender in NC refuses to make mortgage loans in predominantly minority neighborhoods regardless of individual applicants' creditworthiness. This practice is called:Fair Housing
- A NC property manager who discovers a fair housing violation by a tenant (e.g., a tenant harassing another tenant based on race) should:Property Management
Key Terms to Know
An illegal practice where lenders or insurers deny services or charge higher rates in certain neighborhoods based on the racial or ethnic composition of those areas.
Fair Housing ActFederal law prohibiting discrimination in the sale, rental, or financing of housing based on race, color, national origin, religion, sex, disability, and familial status.
Short SaleA sale of real property where the sale proceeds are less than the outstanding mortgage balance, requiring lender approval.
Adjustable-Rate Mortgage (ARM)A mortgage with an interest rate that changes periodically based on a financial index, usually after an initial fixed-rate period.
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